VIENTIANE, Laos—The Laotian prime minister denied Tuesday the imminent start of construction on a proposed dam that has upset environmentalists and the country’s neighbors downstream on the Mekong River, and prompted an expression of concern from the U.S.

“I confirm that there is no groundbreaking” set for Wednesday on the $3.5 billion Xayaburi dam, Thongsing Thammavong told The Wall Street Journal, contradicting media reports a day earlier that had cited a government minister.

Plans for the dam are still subject to “further study,” he said through a translator, after chairing an Asia-Europe summit in this Southeast Asian nation.

“It’s not real,” he said of the reports. “It’s only…organizing a small group of media to visit, and some concerned people, scientists and other people.”

Laos has said it wouldn’t begin work on the dam, part of an ambitious plan for dams along the Mekong, before addressing concerns over the impacts, especially on downstream fishing in the river that supports an estimated 60 million people, and irrigation.

But news reports this week said that Laos was about to begin construction and that it claimed to have addressed the concerns.

Thailand has agreed to buy most of the power from the 1,260-megawatt dam, but some Thai residents who say their livelihoods will be damaged have sued a Thai company involved in the project.

Vietnam and Cambodia have sharply criticized the planned project.

The U.S. State Department on Monday said that while it recognizes the important economic role of dams in managing water resources, “our own experience has made us acutely aware of the economic, social and environmental impacts that large infrastructure can have over the long term.”

Write to Ben Otto at ben.otto@dowjones.co

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